marina district development co., llc d/b/a...

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

MARINA DISTRICT DEVELOPMENT CO., LLC d/b/a BORGATA HOTEL CASINO & SPA,

Plaintiff, v.

PHILLIP D. IVEY, JR., GEMACO INC., CHENG YIN SUN, and JANE DOE,

Defendants.

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COMPLAINT

Civil Action No. ______

Via ECF

Plaintiff Marina District Development Co., LLC d/b/a Borgata Hotel Casino &

Spa (“Borgata”), through its attorneys Agostino & Associates, P.C., as and for its

Complaint against Defendants Phillip D. Ivey, Jr. (“Ivey”), Gemaco Inc. (“Gemaco”),

Cheng Yin Sun (“Sun”), and Jane Doe states as follows:

Parties

1. Borgata is a limited liability company organized and existing pursuant to

the laws of the State of New Jersey, with its principal place of business at One Borgata

Way, Atlantic City, New Jersey.

2. At all relevant times, Borgata operated a hotel and casino duly licensed

and operating under the New Jersey Casino Control Act, N.J.S.A. 5:12-1 et seq. (the

“Act”).

3. Upon information and belief, Ivey is a citizen of the United States

currently residing in Mexico.

4. Upon information and belief, Ivey is a professional gambler and holds

himself out to be the greatest professional poker player of all time.

Case 1:14-cv-02283-NLH-AMD Document 1 Filed 04/09/14 of 58 PageID: 1

5. Upon information and belief, Gemaco is a corporation organized and

existing pursuant to the laws of the State of Missouri, with its principal place of business

at 2925 NW Highway 7, Blue Springs, Missouri.

6. Gemaco is in the business of providing high quality playing cards and

other gaming products to casinos, as well as the promotional products and wholesale gift

industries.

7. Upon information and belief, Gemaco is registered to do business in the

State of New Jersey as a foreign corporation.

8. Upon information and belief, Gemaco sells its playing cards to Borgata

and multiple other casino licensees in Atlantic City, New Jersey.

9. Upon information and belief, Sun is a resident of the State of Nevada.

10. Upon information and belief, Sun is a professional gambler who has been

banned from several casinos around the world.

11. Jane Doe is intended to identify the specific Gemaco employee

responsible for inspecting the playing cards delivered to Borgata relevant to the facts of

this case.

Jurisdiction and Venue

12. Jurisdiction in the United States District Court for the District of New

Jersey is appropriate pursuant to 28 U.S.C. § 1332(a)(1) or 28 U.S.C. § 1332(a)(3)

because all parties are citizens of different states for diversity jurisdiction purposes, or all

parties are citizens of different states and subjects of a foreign state are additional parties,

and the amount at issue exceeds $75,000.

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13. Venue in the United States District Court for the District of New Jersey is

appropriate pursuant to 28 U.S.C. § 1391(b) because substantially all the events or

omissions giving rise to the claims herein occurred in New Jersey.

Facts Common to All Counts

14. Borgata operates a casino in Atlantic City, New Jersey.

A. The Playing Cards

15. On and before April 2012, Borgata purchased all the playing cards used in

its casino from Gemaco.

16. The playing cards purchased from Gemaco by Borgata have a custom-

designed back consisting of a dominant background color, on top of which appear edge-

to-edge rows of small white circles that are designed to look like the top of a round cut

diamond. The illusion of the diamond facets is created by shading inside the circle with a

lighter shade of the dominant background color. The background color fills the empty

spaces between the circles. Two Borgata Hotel Casino & Spa logos on each card back

are placed symmetrically and facing in opposite directions. An image of the card back at

issue in this Complaint is attached as Exhibit A.

17. The pattern used by Borgata on the back of the cards purchased from

Gemaco is required to be perfectly symmetrical so that the back of one card is

indistinguishable from the backs of all other cards, and the edges of each card are

indistinguishable from one another.

18. Gemaco represents and warrants that its playing cards are tamper proof,

sealed and certified by individual and intensive inspection.

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19. Gemaco further warrants that its playing cards are fit for their intended

purpose and of “first grade quality,” free of any and all defects for use in casino gaming

operations.

20. Prior to April 11, 2012, May 3, 2012, July 26, 2012 and October 7, 2012,

Borgata placed orders with Gemaco for decks of playing cards to be used in its casino.

B. Mini Baccarat

21. Mini Baccarat (“Baccarat”) is a game of chance in which the players bet

on the relative value of two hands of two cards each before the hands are dealt or the

cards are revealed. One hand is referred to as the “player’s” hand, the other is known as

the “banker’s” hand. The “banker” is not the House, and the “player” does not refer to

those playing the game. Players are free to bet on either hand.

22. The object of Baccarat is to bet on the hand that will have a total value

closest to nine (9). Tens, face cards, and any cards that total ten are counted as zero. All

other cards are counted at face value. The scores of hands range from 0 to 9. Neither

hand can “bust.”

23. The game is generally played with six or eight decks of cards placed into a

dealing “shoe.” Before the cards are dealt, the players must place one of three bets:

“banker,” “player,” or “tie.” A bet on “banker” is a bet that the banker will hold the hand

closest to nine. A bet on “player” is a bet that the player will have the hand closest to

nine. A bet on “tie” is a bet that the two hands will be tied.

24. Two hands are then dealt from the shoe, one for the “player” and one for

the “banker.” The first card is dealt to the “player’s” hand. In certain circumstances, a

third card may be dealt to either or both hands, depending on the score of the hands.

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25. A winning bet on “banker” pays 19 to 20. A winning bet on “player” pays

even money. A winning bet on “tie” pays 8 to 1.

26. The house advantage for Baccarat is approximately 1.06% on “banker”

bets, 1.24% on “player” bets, and 4.84% on “tie” bets.

27. Based on mathematical probability, when the first card dealt to the

“player” has a value of 6, 7, 8, or 9, the chances of the “player” hand winning are greatly

increased. Conversely, if the “player” hand’s first card has a value of 10, 1 (Ace), 2, 3, or

4, the chances of the “banker” hand winning are greatly increased.

28. Thus, if a player knows the value of the first card in the shoe before it is

dealt, the player can reverse the house advantage, and instead have a significant

advantage over the house. The player with this “first card knowledge” has an overall

advantage of approximately 6.765% over the house. The advantage is up to 21.5% for

“player” bets and up to 5.5% for “banker” bets.

C. Ivey Plays Baccarat at Borgata

29. In about April 2012, Ivey contacted Borgata to arrange a visit during

which he intended to play Baccarat for high stakes.

30. Because of his notoriety as a high-stakes gambler, and the amount of

money he intended to gamble, Ivey was able to negotiate special arrangements to play

Baccarat at Borgata.

31. Ivey agreed to wire a “front money” deposit of $1 million to Borgata.

32. The maximum bet was established at $50,000 per hand.

33. At his request, Ivey was provided with a private area or “pit” in which to

play.

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34. At his request, Ivey was provided with a casino dealer who spoke

Mandarin Chinese.

35. At his request, Ivey was permitted to have a guest sitting at the table while

he played.

36. At his request, Ivey was provided with one 8-deck shoe of purple Gemaco

Borgata playing cards to be used for the entirety of each session of play.

37. At Ivey’s request, an automatic card shuffling device was used to shuffle

the cards after each shoe was dealt.

38. The pretext given for some of these requests was that Ivey was

superstitious.

39. Ivey misrepresented his motive, intention and purpose and did not

communicate the true reason for his requests to Borgata at any relevant time.

40. Ivey’s true motive, intention, and purpose in negotiating these playing

arrangements was to create a situation in which he could surreptitiously manipulate what

he knew to be a defect in the playing cards in order to gain an unfair advantage over

Borgata.

41. At all relevant times, Borgata was not aware of the defect in the playing

cards or Ivey’s true motive for negotiating special arrangements.

42. Ivey arrived at Borgata on or about April 11, 2012.

43. Ivey played Baccarat for approximately 16 hours on April 11, 2012.

44. During Ivey’s Baccarat play on April 11, 2012 he purportedly won

$2,416,000.

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45. During Ivey’s Baccarat play on April 11, 2012, his average bet was

$25,000.

46. Borgata used purple Gemaco playing cards in all the Baccarat games

played between Borgata and Ivey on April 11, 2012.

47. Ivey was accompanied by Sun at the table while he played Baccarat.

48. Sun spoke to the dealer in Mandarin Chinese.

49. As explained below, Sun gave instructions to the dealer on how to flip

over and lay the cards out on the table.

50. It is not uncommon for Baccarat players to make special requests for how

the cards are dealt based on individual superstitions.

51. In “Macau” style dealing, for example, players are allowed to touch the

cards, and often tear them, bend them, or blow on them. This is permitted because a new

deck is used for each hand. Ivey’s scheme did not require new decks for each hand. In

fact, his scheme depended on the same decks being shuffled and re-used.

52. Borgata accommodated Sun’s request for how cards were to be dealt.

53. At no time did Sun or Ivey disclose the true purpose behind Sun’s request

for how the cards were to be dealt.

54. As explained below, the true purpose of Sun’s request was to manipulate a

defect in the playing cards to gain an unfair advantage over Borgata.

55. In May 2012, Ivey made a second trip to Borgata to play Baccarat.

56. Prior to his second trip in May 2012, Ivey affirmatively requested the

same arrangements as his first trip.

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57. Ivey again misrepresented his motive, intention and purpose and did not

communicate to Borgata the true reason for the arrangements he requested for the May

2012 trip.


arrangements for the second trip was to create a situation in which he could

surreptitiously manipulate what he knew to be a defect in the playing cards in order to

gain an unfair advantage over Borgata.

59. Ivey played Baccarat on the second trip pursuant to the same arrangements

he had negotiated for the trip in April 2012.

60. Ivey arrived at Borgata on or about May 3, 2012.

61. Ivey played Baccarat for approximately 56 hours during the May 2012

trip.

62. During Ivey’s Baccarat play in May 2012 he purportedly won $1,597,400.

63. During Ivey’s Baccarat play in May 2012, his average bet was $36,000.


played between Borgata and Ivey in May 2012.

65. On the May 2012 trip, Ivey was again accompanied by Sun at the table

while he played Baccarat.

66. On the May 2012 trip, Sun again spoke to the dealer in Mandarin Chinese,

giving him instructions on how to turn the cards as they were dealt.

67. Borgata again accommodated Sun’s request for how cards were to be

dealt.

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68. At no time during the May 2012 trip did Sun or Ivey disclose the true

purpose behind Sun’s request for how the cards were to be dealt.

69. The true purpose of Sun’s request was to manipulate a defect in the

playing cards to gain an unfair advantage over Borgata.

70. In July 2012, Ivey made a third trip to Borgata to play Baccarat.

71. Prior to the July 2012 trip, Ivey negotiated revised playing terms.

72. Instead of making a $1 million “front money” deposit, Ivey increased his

“front money” deposit to $3 million.

73. By increasing his “front money” deposit, Ivey negotiated a raise in the

maximum bet to $100,000 per hand.

74. Ivey requested that all other arrangements he had negotiated for the trips

in April 2012 and May 2012 remain the same.

75. Ivey again misrepresented his motive, intention and purpose and did not

communicate to Borgata the true reason for the arrangements he requested for the July

2012 trip.

76. Having been successful during his first two trips, Ivey knew that he could

surreptitiously manipulate what he knew to be a defect in the playing cards to gain an

unfair advantage over Borgata.

77. Ivey’s true motive, intention, and purpose in negotiating these revised

playing arrangements for the third trip was to create a situation in which he could make

larger bets while surreptitiously manipulating what he knew to be a defect in the playing

cards to gain an unfair advantage over Borgata.

78. Ivey’s requests were accommodated by Borgata.

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79. Ivey arrived at Borgata on or about July 26, 2012.

80. Ivey played Baccarat for approximately 17 hours during the July 2012 trip.

81. During Ivey’s Baccarat play in July 2012 he purportedly won $4,787,700.

82. During Ivey’s Baccarat play in July 2012, his average bet was $89,000.


played between Borgata and Ivey in July 2012.

84. On the July 2012 trip, Ivey was again accompanied by Sun at the table


85. On the July 2012 trip, Sun again spoke to the dealer in Mandarin Chinese,

giving him instructions on how to turn the cards as they were dealt.


dealt.

87. At no time during the July 2012 trip did Sun or Ivey disclose the true




89. In October 2012, Ivey made a fourth trip to Borgata to play Baccarat.

90. Ivey affirmatively requested the same betting and playing

accommodations as his July 2012 trip.

91. Ivey played Baccarat on the fourth trip pursuant to the same arrangements

he had negotiated for the trip in July 2012.

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92. Ivey misrepresented his motive, intention and purpose and did not

communicate to Borgata the true reason for the arrangements he requested for the

October 2012 trip.


arrangements for the fourth trip was to create a situation in which he could surreptitiously

manipulate what he knew to be a defect in the playing cards in order to gain an unfair

advantage over Borgata.

94. Ivey arrived at Borgata on or about October 5, 2012.

95. Ivey told Borgata’s Executive Director of Relationship Marketing, Greg

Kravitz, that he did not intend to play Baccarat until October 7, 2012 because he was

tired from travel and had plans on October 6, 2012.

96. Ivey did not begin playing Baccarat until October 7, 2012.

97. Sun did not arrive at Borgata until the evening of October 6, 2012.

98. On October 7, 2012, Borgata received a media report in which it was

reported that a casino in London was withholding approximately £7.3 million in

gambling winnings from Ivey.

99. The October 7, 2012 report indicated that the casino, Crockfords, was

investigating circumstances surrounding Ivey’s playing Punto Banco, which is essentially

the same game as Baccarat.

100. The October 7, 2012 report did not elaborate on what Ivey was accused of

doing.

101. Ivey played Baccarat for 18 hours beginning October 7, 2012 and ending

October 8, 2012.

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102. During Ivey’s Baccarat play on October 7-8, 2012, he was ahead by as

much as $3.5 million.

103. During Ivey’s Baccarat play on October 7-8, 2012 he eventually

purportedly won $824,900.

104. During Ivey’s Baccarat play on October 7-8, 2012, his average bet was

$93,800.

105. Upon information and belief, Ivey intentionally lost a portion of his

winnings at the end of the October 7-8, 2012 Baccarat session.


played between Borgata and Ivey on October 7-8, 2012.

107. On the October 2012 trip, Ivey was again accompanied by Sun at the table


108. On the October 2012 trip, Sun again spoke to the dealer in Mandarin

Chinese, giving him instructions on how to turn the cards as they were dealt.


dealt.

110. At no time during the October 2012 trip did Sun or Ivey disclose the true




112. At times during Ivey’s four trips to Borgata in 2012 to play Baccarat, he

requested that another dealer replace a dealer who did not understand the “good card” -

“bad card” turns.

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113. After the Baccarat session ended on October 8, 2012, Ivey requested that

his “front money” and winnings be wired to a bank account in Mexico.

114. This was the same request he made with respect to his “front money” and

winnings for the trips in April, May, and July 2012.

115. Before Ivey left Borgata on October 8, 2012, its Executive Director of

Relationship Marketing, Greg Kravitz, asked Ivey about the October 7, 2012 report on

the Crockfords’ incident.

116. Ivey stated that he did not want to talk about it, that he was disgusted with

the situation, that he had done nothing wrong, and that he was going to sue Crockfords to

recover his winnings.

117. Ivey asked Kravitz if anyone else at Borgata was aware of the Crockfords

incident and was told that other employees were aware of the report.

118. After Ivey left Borgata on October 8, 2012, additional information

regarding the Crockfords’ incident was disseminated via the internet.

119. It was established that Crockfords was withholding Ivey’s winnings

because it believed Ivey and Sun perpetrated a scam involving the manipulation of cards

to gain “first card knowledge.”

120. Ivey ultimately sued Crockfords in England to recover his winnings.

121. The Ivey versus Crockfords case is ongoing in England.

122. Ivey purportedly won a total of $9,626,000 playing Baccarat at Borgata

between April 2012 and October 2012.

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D. Edge Sorting – Borgata/Crockfords Scam

123. “Edge sorting” exploits manufacturing defects in playing cards in order to

“mark” cards without the player actually touching, defacing, or placing a physical mark

on the cards.

124. The backs of casino playing cards generally contain a repeating diamond

or geometrical pattern as seen in Exhibit A.

125. If the cards are not cut symmetrically during the manufacturing process,

the two long edges of the cards will not be identical. In other words, one edge will have

more of the geometrical pattern than the other. See Exhibit B.

126. During play, Ivey and Sun used the accommodations they requested from

Borgata to “turn” strategically important cards so that they could be distinguished from

all other cards in the deck.

127. The dealer would first lift the card so that Sun could see its value before it

was flipped over all the way and placed on the table. If Sun told the dealer “Hao”

(pronounced “how”), which translates to English as “good card,” he was instructed to

continue to flip the card over so that the orientation of the long edges of the card would

stay on the same side when flipped. In other words, the right edge of the card as seen by

Sun before the card was turned all the way over would still be the right edge of the card

as she looked at when it was laid face up on the table.

128. If Sun told the dealer “Buhao” (pronounced “boohow”), which translates

into English as “bad card,” he was instructed to flip the card side to side, so that the long

edges would be reversed when flipped. In other words, the right edge of the card as seen

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by Sun before the card was turned all the way over would now be the left edge of the card

as she looked at it when it was laid face up on the table.

129. By telling the dealer “good card” or “bad card” in Mandarin, the dealer

would place the cards on the table so that when the cards were cleared and put in the used

card holder, the leading edges of the strategically important cards could be distinguished

from the leading edges of the other cards in the deck.

130. Upon information and belief Ivey and Sun “turned” the cards with values

of 6, 7, 8, and 9, so that they could be distinguished from all other cards in the deck.

131. The process of “edge sorting” all the cards in the decks took more than

one shoe.

132. Ivey and Sun knew that if an automatic card shuffler was used, the edges

of the cards would remain facing in the same direction after they were shuffled.

133. Conversely, Ivey and Sun knew that if the cards were shuffled by hand,

the dealer would turn part of the deck, rendering their attempts to “turn” the strategically

important cards useless.

134. Keeping the edges of the cards facing the same direction is the reason Ivey

requested the use of an automatic card shuffler.

135. Ivey also knew that if the same cards were not reused for each shoe, there

would be no benefit to “edge sorting.”

136. That is why Ivey requested that the same cards be reused for each shoe.

137. The leading edge of the first card in the shoe is visible before the cards are

dealt.

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138. Once the “edge sorting” was completed, Ivey and Sun were able to see the

leading edge of the first card in the shoe before it was dealt, giving them “first card

knowledge.”

139. If the first card in the shoe was turned, that meant a strategically important

card was being dealt to the “player” hand, and Ivey would bet accordingly.

140. If the first card in the shoe was not “turned,” that meant that a less

advantageous card was being dealt to the “player” hand, and Ivey would again bet

accordingly.

141. This “first card knowledge” changed the overall odds of the game from an

approximate 1.06% house advantage to an approximately 6.765% advantage for Ivey.

142. Ivey began each playing session with bets well below the maximum bet.

143. Ivey bet below the maximum bet until he and Sun had completed “edge

sorting” all the cards in the shoe.

144. Once all the cards in the shoe were “edge sorted,” Ivey “flatlined” at the

maximum bet; i.e. he bet the maximum amount on every hand.

145. A review of Ivey’s betting pattern shows that once the cards were “edge

sorted,” when he bet on “player,” the first card dealt was significantly more likely to be a

strategically important card.

146. Conversely, once the cards were “edge sorted,” when Ivey bet on

“banker,” the first card dealt was significantly more likely to be a strategically

unimportant card.

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E. Ivey’s Admissions

147. Ivey made similar playing accommodations and was able to use “edge

sorting” to exploit defective playing cards at Crockfords casino in London on or about

August 20-21, 2012.

148. Crockfords withheld Ivey’s purported winnings as a result of determining

Ivey used “edge sorting.”

149. On July 5, 2013, Ivey sued Gentings Casinos UK Limited t/a Crockfords

Club to recover the monies withheld from him on August 20-21, 2012.

150. In its defense to the action, Crockfords specifically alleged Ivey’s use of

“edge sorting” by requesting the same playing accommodations he requested from

Borgata.

151. Both publicly and in his reply to Crockfords’ defense, Ivey specifically

admitted to “edge sorting.”

152. In his reply to Crockfords’ defense, Ivey specifically admitted “[d]uring

the course of play…Claimant [Ivey] employed a technique known as ‘edge sorting’ or

sometimes ‘playing the turn.’”

153. In his reply to Crockfords’ defense, Ivey further admitted “[d]uring the

course of the second session on 20 August 2012, [Ivey] (as was his common practice)

made various requests including for decks of cards to be changed at the end of hands….

This continued until [Sun] identified a deck or decks of cards where the pattern on the

reverse side of the cards was asymmetrical (in that one "long" side was different from the

opposite side).”

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154. In his reply to Crockfords’ defense, Ivey further admitted “[t]his

information allowed [Ivey and Sun] to ‘edge sort’ the deck or decks….”

155. In his reply to Crockfords’ defense, Ivey further admitted to “edge

sorting” by

[Sun’s] asking the dealer…to reveal each card in turn by lifting the edge furthest from the dealer so that [Sun] could identify whether the card was a 7, 8, or 9 (being, in addition to 6, the key cards in Baccarat). The first time that [Sun] identified a key card, she told the dealer that it was a ‘good’ card which she wanted the dealer to rotate in the opposite direction to all of the other cards, and the dealer complied with that request. In this way, the long edges of the key card became distinguishable from those of the other cards. Thereafter, as the cards were lifted by the dealer, [Sun] would say “good” or “bad”, and the dealer would turn the cards one way or the other accordingly. In this way, over the course of time, the cards in the deck or decks were increasingly orientated so that “good” cards and “bad” cards faced in opposite directions. The effect of the above was that when the first card was in the shoe before it was dealt and before [Ivey] had to place his bet, [Ivey] had an increased chance of knowing whether that card was (or was not) a key card and would bet accordingly.

156. In his reply to Crockfords’ defense, Ivey further admitted “[i]n order to

maintain the advantage he had achieved, [Ivey], alternatively Ms. Sun, asked the dealer to

retain the same deck or decks….”

157. In his reply to Crockfords’ defense, Ivey further admitted that he exploited

his status as a “high roller” to make certain requests for special treatment, which were

actually misrepresentations made to conceal his actual intent to manipulate the game,

stating “the refusal to grant such requests creates a serious risk of deterring the very high

rollers which the casinos…are anxious to attract.”


Count I (Breach of Contract

against Defendants Ivey and Sun)

158. Plaintiff repeats the allegations contained in Paragraphs 1-157 as though

set forth fully here.

159. On each of the dates in question, as a condition of their wagering, Ivey and

Sun explicitly agreed to abide and be bound by the rules set forth by New Jersey’s

Division of Gaming Enforcement (“DGE”) pursuant to the authority granted to it by the

New Jersey legislature.

160. Borgata, by virtue of New Jersey law, expected that by meticulously

following the rules and regulations controlling the conduct of its Baccarat games as

intensively prescribed by the Act and DGE rules and regulations, that its game was fair

under controlling law that mandates “fair odds” to patrons.

161. Because of Ivey and Sun’s misconduct, unfair play and the use of their

influence as “high rollers” to deceive Borgata, Ivey and Sun succeeded in manipulating

the Baccarat game to deprive the game of its essential element of chance.

162. Because of Ivey and Sun’s misconduct, unfair play and deception, the

Baccarat games at issue did not present the legally required “fair odds” or those assumed

attendant circumstances dictated by New Jersey law and regulations that would assure the

fairness, integrity and vitality of the casino operation in process pursuant to N.J.S.A. §

5:12-100(e).

163. The Act further provides that “[i]t shall be unlawful knowingly to use or

possess any marked cards.” N.J.S.A. § 5:12-115(b).

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164. The Act further provides that to “carry on” with or “expose for play” cards

that are marked “in any manner” is expressly prohibited. N.J.S.A. § 5:12-115(a)(2).

165. One each date in question, Ivey and Sun played Baccarat with cards that

had been manipulated and “marked” so that their value was identifiable to Ivey and Sun

before bets had to be placed and before the cards were dealt, in violation of N.J.S.A. §

5:12-115.

166. In surreptitiously manipulating the edges of the playing cards, Ivey and

Sun used the automatic card shuffler as a “cheating device” to ensure that the edges of the

cards would remain facing the same direction after they were shuffled. Although the

automatic card shuffler is not originally designed, constructed, or programmed

specifically for use in obtaining an advantage (it is intended to ensure the randomness of

the shuffle), Ivey and Sun used the automatic card shuffler as an integral part of their

“edge sorting” scheme, thus converting its use to that of a cheating device.

167. The use of the automatic card shuffler as a cheating device is a violation of

N.J.S.A. § 5:12-113.1, which makes it a crime to “use or assist another in the use of, a

computerized, electronic, electrical or mechanical device which is designed, constructed,

or programmed specifically for use in obtaining an advantage at playing any game in a

licensed casino or simulcasting facility.”

168. Ivey also used Sun, whose ability to manipulate the orientation of the

cards and then quickly and accurately identify their values later by reading the edges was

integral to the fraudulent and dishonest scheme, as a cheating device in violation of

N.J.S.A. § 5:12-114, which makes it a crime “[k]nowingly to use or possess any cheating

device with intent to cheat or defraud.” Id.

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169. Each of Ivey and Sun’s actions constitutes “swindling and cheating” under

N.J.S.A. § 5:12-115(a), which provides that “a person is guilty of swindling and cheating

if the person purposely or knowingly by any trick… or by a fraud or fraudulent

scheme…wins or attempts to win money or property…in connection to casino

gambling.”

170. Borgata fully performed all covenants, conditions, and obligations

required to be performed by reason of the contract, except to the extent waived, excused

or made impossible by Ivey and Sun’s breach of the contract.

171. As a direct and proximate result of Ivey and Sun’s breaches, Borgata was

injured.

WHEREFORE, Plaintiff demands judgment against Defendants Ivey and Sun as

follows:

i. Damages in the amount of $9,626,000, representing the amount of

Borgata’s loss resulting from Defendants Ivey’s and Sun’s breaches of

their contract with Borgata; and

ii. The costs and attorneys’ fees associated with this action; and

iii. Such other and further relief as the Court deems just and proper.

Count II

(Breach of Implied Contract against Defendants Ivey and Sun)



173. A contract may be implied by the conduct of the parties to it.

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174. On each of the dates in question, Ivey negotiated specific conditions

pursuant to which he would play Baccarat at Borgata.

175. Each party intended that a contract be formed, and acted as though a

contract had been formed.

176. In exchange for honest play pursuant to the rules of the game, Ivey and

Sun were permitted to wager on Baccarat. When Ivey had the winning bet, it was

understood Borgata would pay him at the established odds. When Ivey had the losing

bet, it was understood that he would surrender his bet to Borgata. An implicit term of

this contract was that Ivey would accept the inherent odds of the game, unadjusted by

prior knowledge of the cards about to be played.

177. By making affirmative misrepresentations to manipulate the playing

conditions, Ivey and Sun were surreptitiously able to use “edge sorting” to identify

strategically important cards before bets were placed and before the cards were dealt and

their values revealed.

178. These affirmative misrepresentations allowed Ivey and Sun to gain an

unfair and significant advantage over Borgata.



or made impossible by Ivey and sun’s breach of the contract.

180. Ivey and Sun’s misrepresentations and “edge sorting” breached the

implied contract between the parties.

22


181. Ivey and Sun’s conduct deprived the Baccarat game of its implied and

material element of chance based on the inherent odds of the game for both player and

casino without prior knowledge of the cards about to be played.

182. Because of Ivey’s and Sun’s misconduct, unfair play and deception, the

Baccarat games at issue did not present the legally required “fair odds” or those assumed

attendant circumstances dictated by New Jersey statute and regulations that would assure

the fairness, integrity and vitality of the casino operation in process pursuant to N.J.S.A. §

5:12-100(e).

183. Ivey and Sun further breached their implied contract with Borgata to abide

by the rules of gaming set forth in the Act, specifically not to use cards that were marked

“in any manner.”

184. As a result of Ivy’s and Sun’s breaches, Borgata was injured.


follows:


Borgata’s loss resulting from Defendants Ivey’s and Sun’s breaches of

their implied contract with Borgata; and



23


24

Count III (Breach of Implied Covenant of Good Faith and Fair Dealing




186. A contract or implied contract existed between Ivey, Sun and Borgata.

187. The contract between Ivey, Sun and Borgata contained an implied

covenant of good faith and fair dealing by and between the parties that prohibited them

from engaging in any conduct that would prevent the other party from receiving the

benefits to which it was entitled under the contract.

188. With false pretense, Ivey and Sun surreptitiously used “edge sorting” to

identify valuable cards before bets were placed and before the cards were dealt and their

values revealed to gain a significant advantage over Borgata.

189. Ivey and Sun also breached their agreement with Borgata to play by the

requirements established by the Act and the DGE regulations promulgated thereunder.

190. Ivey and Sun acted in bad faith and with the purpose of depriving Borgata

of rights and/or benefits under the contract.

191. Ivey’s and Sun’s actions breached the implied covenant of good faith and

fair dealing.



or made impossible by Ivey’s and Sun’s breaches of the contract.

193. As a direct and proximate result of Ivey’s and Sun’s breaches of the

implied covenant of good faith and fair dealing, Borgata was injured.



follows:


Borgata’s loss resulting from Defendants Ivey’s and Sun’s breaches of the

implied covenant of good faith and fair dealing; and



Count IV

(Fraudulent Inducement against Defendants Ivey and Sun)



195. By commencing play, Ivey and Sun implicitly and intentionally

misrepresented to Borgata that they intended to abide by the rules of honest play

established and required by the Act and the DGE regulations promulgated thereunder.

196. However, this was not true and was a misrepresentation of a material fact.

197. Ivey and Sun intentionally misrepresented to Borgata the true reasons,

motivation and purpose for the playing accommodations they sought, instead providing

false and pretextual reasons to Borgata.


identify valuable cards before bets were made and before the cards were dealt and their


199. On each date in question, Ivey’s and Sun’s misrepresentations and failure

to disclose their intent induced Borgata to allow Ivey and Sun to wager.


200. Borgata reasonably, justifiably and detrimentally relied on the

misrepresentations.

201. Had Borgata known that the misrepresentations made by Ivey and Sun

were false, misleading, and designed to induce Borgata to allow Ivey and Sun to wager,

Borgata would not have permitted Ivey and Sun to wager.

202. As a result of Borgata’s reasonable and justifiable reliance on the material

misstatements and omissions of Ivey and Sun, Borgata was injured.


follows:


Borgata’s loss resulting from Defendants Ivey’s and Sun’s fraudulent

inducement; and



Count V (Declaratory Judgment for Rescission based on Unilateral Mistake




204. On the dates in question, Ivey and Sun negotiated and mutually agreed

with Borgata to a wagering agreement. The purpose of the agreement was to engage in

Baccarat as lawfully set forth by the Act and DGE rules and regulations.

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205. Ivey and Sun knew that “edge sorting,” not the lawful wagering on

Baccarat as set forth by New Jersey laws, was their true purpose.

206. Ivey and Sun knew that the playing accommodations they requested were

intended to create a situation in which the playing cards could be “edge sorted.”

207. Borgata mistakenly believed that Ivey and Sun intended to engage in the

play of Baccarat as lawfully set forth in the Act and DGE rules and regulations.

208. At the time Borgata agreed to play Baccarat with Ivey, Ivey and Sun knew

of or suspected Borgata’s mistake as to their true purpose.

209. Borgata mistakenly believed that the playing accommodations requested

by Ivey and Sun were made in good faith and not to create a situation in which the

playing cards could be “edge sorted.”

210. At the time Borgata agreed to play Baccarat with Ivey, Ivey and Sun

knew of or suspected Borgata’s mistake as to the true purpose of the playing

accommodations Ivey and Sun requested.

211. Borgata’s mistakes resulted from Ivey’s and Sun’s false

misrepresentations to Borgata.

212. Ivey and Sun knew their representations were false when made.

213. Without the knowledge of the true facts and in reasonable and justifiable

reliance on Ivey’s and Sun’s misrepresentations, Borgata was deceived into agreeing to a

contract that differed materially from Borgata’s understanding.

214. As a result of Borgata’s unilateral mistake, of which Ivey and Sun were

aware, Borgata was injured.

27


WHEREFORE, Plaintiff demands declaratory judgment as follows:

i. Rescinding the express and/or implied contract entered into among Ivey,

Borgata, and Sun; and

ii. Directing that Ivey and Sun return the parties to the status quo ante by

disgorging the amount of $9,626,000 obtained pursuant to the illegal

purpose of the express and/or implied agreement; and

iii. The costs and attorneys’ fees associated with this action; and

iv. Such other and further relief as the Court deems just and proper.

Count VI

(Fraud against Defendants Ivey and Sun)



216. Ivey and Sun used Ivey’s influence as a professional high stakes gambler

to deceive Borgata into accepting their misrepresentations and were able to manipulate

the Baccarat game to deprive the game of its essential element of chance.


identify valuable cards before bets were made and before the cards were dealt and their


218. Ivey and Sun knew at the time that they made the misrepresentations and

concealed the material facts alleged above that such misrepresentations were untrue and

that Ivey and Sun were concealing material facts from Borgata.

219. Ivey and Sun acted with the intention to deceive and mislead Borgata, to

fraudulently induce Borgata to permit them to wager and collect purported winnings.

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220. Borgata acted in reasonable and justifiable reliance on Ivey’s and Sun’s

misrepresentations and material omissions.

221. As a direct and proximate result of Ivey’s and Sun’s fraud, Borgata was

injured.


follows:


Borgata’s loss resulting from Defendants Ivey’s and Sun’s fraud; and



Count VII

(Declaratory Judgment for Rescission based on Illegality of Purpose against Defendants Ivey and Sun)



223. On the dates in question, Ivey and Sun were engaged in an unauthorized

and illegal game, subject to rescission pursuant to N.J.S.A. § 2A:16-52.

224. Borgata seeks a declaratory judgment that:

a. The Baccarat games that Ivey and Sun engaged in at Borgata between

April 2012 and October 2012 were illegal games pursuant to New Jersey

law, and that any and all legal rights, interests and obligations purportedly

generated thereby are rescinded as a matter of law; and

b. Ivey and Sun secured purported winnings that are void as a matter of law;

and

29


c. The Parties shall be returned to the status quo ante given the illegality of

Ivey’s and Sun’s use of a fraudulent scheme, marked cards, and cheating

devices to gain a significant and unlawful advantage over Borgata.

WHEREFORE, Plaintiff demands declaratory judgment as follows:

i. Rescinding the express and/or implied contract entered into among Ivey,

Borgata, and Sun; and

ii. Directing that Ivey and Sun return the parties to the status quo ante by

disgorging the amount of $9,626,000 obtained pursuant to the illegal

purpose of the express and/or implied agreement; and



Count VIII

(Unjust Enrichment against Defendants Ivey and Sun)



226. In connection with the Baccarat games at issue, Ivey and Sun received

$9,626,000.

227. But for the foregoing misleading, deceptive and unfair conduct by Ivey

and Sun, Borgata would not have permitted Ivey and Sun to wager or receive any

proceeds from the Baccarat games at issue.

228. Ivey and Sun have retained the money that they purportedly made through

their misleading, deceptive and fraudulent conduct.

30


31

229. As a result of the conduct described above, Ivey and Sun have been

unjustly enriched at the expense of Borgata.

230. Ivey and Sun’s retention of that money violates fundamental principles of

justice, equity and good conscience.

231. Ivey and Sun should be required to disgorge all money, profits and gains

that they have unjustly obtained at the expense of Borgata, and a constructive trust should

be imposed thereon for the benefit of Borgata.


follows:

i. Damages in the amount of $9,626,000, representing the amount by which

Defendants Ivey and Sun have been unjustly enriched at the Borgata’s

expense; and



Count IX

(Conversion against Defendants Ivey and Sun)



233. At all relevant times, Borgata had the right to possession of its casino

gaming chips and other monetary instruments.

234. By engaging in “edge sorting,” Ivey and Sun intentionally interfered with

Borgata’s right to possession of its casino gaming chips and other monetary instruments


by wrongfully exercising dominion and control over such casino gaming chips and other

monetary instruments.

235. Ivey’s and Sun’s intentional interference with Borgata’s right to

possession of its casino gaming chips and other monetary instruments deprived Borgata

of the possession or use of said casino gaming chips and other monetary instruments.

236. As a direct and proximate result of Ivey’s and Sun’s intentional

interference, Borgata sustained ascertainable economic damages.


follows:


Borgata’s loss resulting from Defendants Ivey and Sun’s wrongful

conversion of casino gaming chips and other monetary instruments of

Borgata; and



Count X

(Civil Conspiracy against Defendants Ivey and Sun)



238. A civil conspiracy is an agreement by two or more person to commit a

wrongful act.

239. The agreement constituting a civil conspiracy may be made orally, in

writing, or may be implied by the conduct of the parties.

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240. Prior to April 11, 2012, Ivey and Sun were each aware that “edge sorting”

playing cards by fraud or fraudulent misrepresentations while playing Baccarat at

Borgata was a wrongful act.

241. Prior to April 11, 2012, Ivey and Sun were each aware that utilizing

cheating devices while playing Baccarat at Borgata was a wrongful act.

242. Ivey and Sun orally agreed and intended that the wrongful acts, including

fraud, fraudulent misrepresentation, and the use of cheating devices be committed.

243. Ivey and Sun agreed orally and/or in writing that the wrongful acts,

including fraud, fraudulent misrepresentation, and the use of cheating devices be

committed.

244. By their conduct, it can fairly be implied that Ivey and Sun agreed that the

wrongful acts, including fraud, fraudulent misrepresentation, and the use of cheating

devices be committed.

245. Ivey and Sun shared a common intent, plan or design in the preparation of

the wrongful acts, including fraud, fraudulent misrepresentation, and the use of cheating

devices.

246. Ivey’s and Sun’s fraud, fraudulent misrepresentation, and the use of

cheating devices furthered their conspiratorial agreement.

247. As a direct and proximate result of Ivey’s and Sun’s conspiracy, Borgata

was injured.

33



follows:


Borgata’s loss resulting from the civil conspiracy entered into by Ivey and

Sun to commit wrongful acts against Borgata; and



Count XI

(Participation in a RICO Enterprise in Violation of 18 U.S.C. §§ 1961 and 1962




249. Ivey and Sun conducted and participated in the affairs of a RICO

enterprise through a pattern of racketeering activity in violation of 18 U.S.C. §§ 1961 and

1962.

250. Ivey’s and Sun’s conduct of the activities that constituted “edge sorting,”

including but not limited to fraud, fraudulent misrepresentations, and the use of cheating

devices, constituted an “enterprise” as defined by 18 U.S.C. §§ 1961 and 1962.

251. Ivey’s and Sun’s conduct of the activities that constituted “edge sorting”

over the period from April 2012 through October 2012, including but not limited to fraud,

fraudulent misrepresentations, and the use of cheating devices, constituted a pattern of

activity because they were continuous, repeated, and related to racketeering activity.

34


252. Ivey and Sun participated in a RICO enterprise in violation of Federal law

when they transferred money that was the proceeds of their fraud against Borgata to a

foreign bank account in Mexico, in violation of the Federal wire fraud and anti-money

laundering statutes.

253. By using the telephone and electronic communication to conduct “edge

sorting,” Ivey and Sun violated the Federal wire fraud statute, 18 U.S.C. § 1343, which

prohibits “having devised or intending to devise any scheme or artifice to defraud, or for

obtaining money or property by means of false or fraudulent pretenses, representations,

or promises, transmits or causes to be transmitted by means of wire, radio or television

communication in interstate or foreign commerce.”

254. By transferring the proceeds of the conduct of their enterprise to Mexico

via wire transfer, Ivey and Sun violated the Federal anti-money laundering statute, 18

U.S.C. § 1956(a)(1)(A)(i), which provides that “[w]hoever, knowing that the property

involved in a financial transaction represents the proceeds of some form of unlawful

activity, conducts or attempts to conduct such a financial transaction which in fact

involves the proceeds or specified unlawful activity with the intent to promote the

carrying on of specified unlawful activity” shall be in violation of the anti-money

laundering statute.

255. By transferring the proceeds of the conduct of their enterprise to Mexico

via wire transfer, Ivey and Sun violated the Federal anti-money laundering statute which

prohibits “transport[ing], transmit[ting], or transfer[ring], or attempt[ing] to transport,

transmit or transfer a monetary instrument or funds from a place in the United States to or

through a place outside the United States or to a place in the United States from or

35


through a place outside the United States with the intent to promote the carrying on of a

specified unlawful activity.” 18 U.S.C. § 1956(a)(2)(A).

256. As a direct and proximate result of Ivey and Sun’s participation in a RICO

enterprise, Borgata was injured.


follows:


Borgata’s loss resulting from the racketeering enterprise conducted by

Ivey and Sun; and

ii. Treble damages; and



Count XII

(Participation in a RICO Enterprise in Violation of N.J.S.A. 2C:41-1 et seq. against Defendants Ivey and Sun)



258. Ivey and Sun conducted and participated in the affairs of a RICO

enterprise through a pattern of racketeering activity in violation of the New Jersey

Racketeering Act, N.J.S.A. 2C:41-2(c).

259. Ivey’s and Sun’s conduct of the activities that constituted “edge sorting,”

including but not limited to fraud, fraudulent misrepresentations, and the use of cheating

devices, constituted an “enterprise” as defined by N.J.S.A. 2C:41-1 et seq.

36


260. The conduct of the “edge sorting” enterprise by Ivey and Sun affected

trade or commerce because the enterprise generated significant proceeds, and those

proceeds were transferred out of New Jersey and out of the United States.

261. Both Ivey and Sun were associated with the “edge sorting” enterprise in

that they devised and implemented the conduct of the enterprise.

262. Both Ivey and Sun directly participated in the activities of the “edge

sorting” enterprise by actually conducting the affairs of the enterprise.

263. Both Ivey and Sun engaged in a pattern of racketeering activity by

committing fraudulent practices, making fraudulent misrepresentations, and using

cheating devices in a casino in violation of the Act.

264. Both Ivey and Sun committed at least two acts of fraudulent practices,

fraudulent misrepresentation, and/or the use of cheating devices in a casino over the

period from April 2012 through October 2012.

265. The two or more acts of fraud, fraudulent misrepresentation, and/or the

use of cheating devices in a casino had the same purpose, result, participants, victim, and

method of commission.

266. The two or more acts of fraud, fraudulent misrepresentation, and/or the

use of cheating devices in a casino were not isolated incidents, but were repeated over a

period of at least seven months.

267. As a direct and proximate result of Ivey’s and Sun’s participation in a

RICO enterprise, Borgata sustained ascertainable economic damages.

37



follows:


Borgata’s loss resulting from the racketeering enterprise conducted by

Ivey and Sun; and

ii. Treble damages; and



Count XIII

(Breach of Contract against Defendant Gemaco)



269. In or about October 2011, Gemaco and Borgata entered into a contract for

“high quality” gaming cards that were suitable for Baccarat and compliant with the Act

and the DGE regulations promulgated thereunder.

270. The DGE regulations require that “[a]ll cards used to game at Baccarat

shall be of backs of the same color and design.” N.J.A.C. § 13:69F-3.6.

271. Gemaco further agreed to provide cards that were “first grade quality,”

subject to individual and intensive inspection, free of any and all defects, and suitable for

use in Borgata’s gaming operations.

272. On or about April 11, May 3, July 26, and October 7, 2012, Gemaco

breached the agreement with Borgata by delivering defective and asymmetrical cards that

38


were unsuitable for Baccarat and noncompliant with the requirements set forth by the Act

and the DGE regulations promulgated thereunder.



or made impossible by Gemaco’s breach of the contract.

274. As a direct and proximate result of Gemaco’s breach, Borgata sustained

ascertainable economic damages.

WHEREFORE, Plaintiff demands judgment against Defendant Gemaco as

follows:


Borgata’s loss resulting from Gemaco’s breach of its contract with

Borgata; and



Count XIV

(Breach of Express Warranty against Defendant Gemaco)



276. Pursuant to N.J.S.A. § 12A:2-313(1)(a) and N.J.S.A. § 12A:32-313(1)(b)-

(c), an express warranty may be created by a seller of goods by affirmation, promise,

description or sample.

39


277. Gemaco expressly warranted that the playing cards provided were “first

grade quality,” subject to individual and intensive inspection, free of any and all defects,

and suitable for use in Borgata’s gaming operations.

278. On October 26, 2011, Borgata and Gemaco entered in to a “Playing Card

Sale Contract” (the “Contract”) whereby Borgata purchased a estimated total of 200,448

decks of gaming cards to be delivered by Gemaco to Borgata at monthly intervals.

279. Gemaco warranted that “the goods covered by the Contract are

merchantable and fit for their intended purpose and are also free from defects of material

and workmanship.”

280. DGE regulations require that “[a]ll cards used to game at Baccarat shall be

of backs of the same color and design.” N.J.AC. § 13.69F-3.6.

281. The Contract provides that “Seller shall comply with any and all

applicable requirements of the New Jersey Casino Control Act and the regulations

promulgated thereunder.” See Exhibit C.

282. Pursuant to the Contract, Gemaco did expressly warrant, covenant and

affirm that the playing cards at issue were symmetrical, certified and ready for use in

Borgata’s Baccarat games as specifically ordered, intended and directed by New Jersey

law.

283. The express warranty, affirmations, promises, assurances and descriptions

provided by Gemaco were the basis of the bargain for Borgata in purchasing the Gemaco

products.

284. Gemaco breached its express warranty to Borgata in that the goods were

not in fact “first grade quality,” free of any and all defects, or suitable for Baccarat.

40


285. The playing cards supplied by Gemaco to Borgata were defective from the

day they were sold and were patently unsuitable for use in Borgata’s gaming operations.

286. As a direct and proximate result of the failure of Gemaco to manufacture,

symmetrically cut and inspect the playing cards as warranted, Borgata sustained

ascertainable economic damages.


follows:


Borgata’s loss resulting from Gemaco’s breach of its express warranty;

and



Count XV

(Breach of Implied Warranty against Defendant Gemaco)



288. Gemaco is a worldwide and purportedly first grade manufacturer and

supplier of playing cards for Baccarat, all of which upon delivery were defective, not

merchantable, and otherwise failed to conform to the promises and affirmations of

Gemaco with regard to whether those playing cards were suitable for Baccarat and

compliant with New Jersey statutes and regulations.

289. Pursuant to N.J.S.A. § 12A:2-315, “where the seller at the time of

contracting has reason to know any particular purpose for which the goods are required

41


and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable

goods, there is unless excluded or modified…an implied warranty that the goods shall be

fit for such purpose.”

290. DGE regulations require that “[a]ll cards used to game at Baccarat shall be

of backs of the same color and design.” N.J.A.C. § 13:69F-3.6.

291. Gemaco knew or should have known the precise nature and use of its

product by Borgata pursuant to New Jersey law, rule and regulation, with which Gemaco

agreed to be bound.

292. Gemaco impliedly warranted to Borgata that the playing cards at issue

were free of defects and were merchantable and fit for the ordinary purpose for which

such goods are used, including Baccarat.

293. Gemaco knew or should have known of the potential damages and losses

that Borgata could incur by utilizing defective, asymmetrical, non-compliant playing

cards.

294. Borgata reasonably relied on the skill and judgment of Gemaco in using

the aforesaid product.

295. The playing cards supplied by Gemaco to Borgata were defective and did

not comply with applicable New Jersey statutes or regulations.

296. As a result, Gemaco breached the implied warranty that its playing cards

would be fit for use by Borgata in its Baccarat games.

297. Borgata has suffered ascertainable economic damages as a result of

Gemaco’s breach.

42



follows:


Borgata’s loss resulting from Gemaco’s breach of its implied warranty;

and



Count XVI (Negligence

against Defendants Gemaco and Jane Doe)



299. Defendants Gemaco and Jane Doe were under a duty to exercise

reasonable care in the manufacture and inspection of the playing cards at issue, and

maintained at all relevant times the duty to properly manufacture and certify playing

cards for use in Borgata’s Baccarat games.

300. Defendants Gemaco and Jane Doe knew or should have known the

particular use to be made by Borgata of the playing cards, i.e., that the cards would be

used for Baccarat, precisely as the product was intended.

301. Defendants Gemaco and Jane Doe breached their duty to use reasonable

care in the manufacture of the playing cards supplied by Gemaco to Borgata.

302. Defendants Gemaco and Jane Doe breached their duty to use reasonable

care in the inspection of the playing cards supplied by Gemaco to Borgata.

43


303. As a result of Defendants Gemaco’s and Jane Doe’s negligence, defective

playing cards were supplied by Gemaco to Borgata.

304. Defendants Gemaco’s and Jane Doe’s negligent manufacture and

inspection of the playing cards supplied by Gemaco to Borgata directly and proximately

caused damages to Borgata.

305. As a result of Defendants Gemaco’s and Jane Doe’s negligence, Borgata

sustained ascertainable economic damages.

WHEREFORE, Plaintiff demands judgment against Defendants Gemaco and Jane

Doe as follows:

i. damages in the amount of $9,626,000, representing the amount of

Borgata’s loss caused by Defendants Gemaco’s and Jane Doe’s

negligence; and



Count XVII

(Respondeat Superior against Defendant Gemaco)



307. Gemaco was at all relevant times the superior, employer, manager and

superintendant of Jane Doe, and did at all relevant times maintain a duty to exercise

reasonable care in the manufacture, inspection, certification and provisions of its gaming

cards to Borgata.

44


308. Gemaco knew at all relevant times of its legal obligations pursuant to New

Jersey statutes and DGE rules and regulations to manufacture, inspect and certify the

cards at issue were suitable for use in a casino for Baccarat.

309. At all times, Jane Doe was acting within the scope of her employment by

Gemaco.

310. By failing to properly manufacture, inspect, and certify the playing cards

delivered by Gemaco to Borgata, Jane Doe breached every duty of care owed to Borgata

and violated applicable New Jersey statutes and regulations.

311. As Jane Doe’s employer, Gemaco is vicariously liable to Borgata for

breaches of duty committed within the scope of Jane Doe’s employment

312. Jane Doe’s breaches of her duty of care to Borgata directly and

proximately caused Borgata to suffer significant economic damages.

313. As a result, Gemaco is liable to Borgata for the damages caused by its

employee Jane Doe.


follows:


Borgata’s loss resulting from Gemaco’s vicarious liability for the

negligence of its employee; and



45


Count XVIII (Declaratory Judgment for Contribution and Indemnification

against Defendant Gemaco)



315. At all relevant times, Gemaco and Borgata had a contractual relationship

by which Gemaco agreed to supply playing cards to Borgata for use in its casino.

316. Gemaco breached the contract with Borgata by negligently failing to

properly manufacture and inspect the cards at issue.

317. Gemaco’s breach of its contractual duties exposed Borgata to the loss it

incurred playing Baccarat with Ivey and Sun.

318. Borgata’s loss was caused solely by Gemaco’s breach of its contractual

obligations to Borgata.

319. Gemaco’s negligent failure to properly cut and inspect the cards at issue

resulted in Borgata’s suffering actual losses in the amount of $9,626,000 in the form of

purported winnings that Borgata paid to Ivey.

320. Equity demands that the losses, including costs and attorneys’ fees,

sustained by Borgata to Ivey resulting from Gemaco’s breach be borne by Gemaco.


follows:

i. Declaring that Gemaco is liable to indemnify Borgata against any and all

current or future losses, including costs and attorneys’ fees, resulting from

Gemaco’s negligent manufacture and inspection of the playing cards

supplied to Borgata; and

46


ii. Declaring that Gemaco is liable to reimburse Borgata for any and all

current or future losses, including costs and attorneys’ fees, resulting from

Gemaco’s negligent manufacture and inspection of the playing cards

supplied to Borgata;

iii. Requiring Gemaco to reimburse Borgata in the amount of $9,626,000,

which has already been paid to Ivey.

iv. The costs and attorneys’ fees associated with this action; and

v. Such other and further relief as the Court deems just and proper.

Dated: Hackensack, NJ April 9, 2014 s/Jeremy M. Klausner Agostino & Associates, P.C. Attorneys for Plaintiff 14 Washington Place Hackensack, NJ 07601 (201) 488-5400 [email protected]

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“Large Design” – More of the circles are visible on this edge.

“Small Design” – Less of the circles are visible on this edge.


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